REAL Wealth Management-2019

I originally ran this series back in 2013. The series has proven to be among the blog’s most popular posts. So we are going to update the original posts and re-run the entire series. Today we address the ongoing “wealth manager” versus “asset management” debate. And there is, or should be, a difference.

The “wealth manager” charade is something that the regulators need to address. All God’s children simply are not “wealth managers.” A true wealth management implies a set of comprehensive services that address a client’s entire wealth issues – including portfolio management, risk management, tax planning, retirement planning and retirement distribution planning. An asset management is often limited to just that, portfolio management.

Another important distinction that needs to be made is comprehensive “wealth manager” versus “product pusher.” A study by CEG Worldwide concluded that less than 10 percent of those holding themselves out as “wealth managers” actually qualified as wealth managers, with the remaining 90 percent being nothing more than product pushers. Just to make myself clear, product is not inherently bad. The problem is when the only thing the “wealth manager” has to contribute it selling product, with no knowledge of or no provision of the services involved in the other aspects of comprehensive wealth management.

True wealth management is a process, not a product.  True wealth management is more than just asset allocation or portfolio optimization.  In my opinion, true wealth management involves a number of issues, most notably accumulation, preservation and distribution of wealth. In too many cases you simply have product pushers addressing accumulation, with no services related to the preservation and distribution aspects of wealth management.

Over the rest of the week, I will write a post each addressing a separate stage of the wealth management process: accumulation, preservation, and retirement and distribution planning. In the final installment, I will discuss the proper way to combine each stage into a comprehensive wealth management plan.

Next: REAL Wealth Management – Accumulation

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